Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Unique Three-River Bottom Candlestick: Summary

The unique three-river bottom candlestick is supposed to be a bullish reversal, but it actually acts as a bearish continuation, that is, if you can find it. The candle pattern has
a frequency rank of 89 where 1 is the most popular candle out of 103 candle types. Overall performance is beyond the far side of mid list, too, and that means it does not perform well.

Unique Three-River Bottom Candlestick: Discussion

The unique three-river bottom is supposed to act as a bullish reversal, but testing shows that it is really a bearish continuation candle 60% of the time. As a continuation rate, that ranks
22nd. With a frequency rank of 89, this candle pattern will be difficult to find. The overall performance rank is 60 and that means even if you do find it, you might be wasting your time. It
just doesn't outperform.

The best average move 10 days after the breakout is a drop of 5.6% in a bear market. That ranks 25th. I consider moves of 6% or higher to be good ones, so this candle comes close. Taking
a closer look at the performance numbers reveals that the unique three-river bottom does best in a bear market, regardless of the breakout direction. However, the sample size is very small,
13 or fewer. In fact, I found only 80 out of over 4.7 million candle lines.

Unique Three-River Bottom Candlestick: Identification Guidelines

Characteristic

Discussion

Number of candle lines

Three.

Price trend leading to the pattern

Downward.

Configuration

Look for a tall bodied black candle in a downward price trend. Following that, another black body rests inside the prior body, but the lower shadow is below
the prior day's low. The last day is a short bodied white candle that remains below the body of the prior candle.

Unique Three-River Bottom Candlestick: Three Trading Tidbits

Unique three-river bottom candles that appear within a third of the yearly low act as continuations most often -- page 867.

Select tall candles for the best performance -- page 864.

Trade a downward breakout from the candle in a downward primary trend -- page 866.

Unique Three-River Bottom Candlestick: Example

The unique three-river bottom candlestick appears circled in red on the daily scale. The first candle is a black candle with a tall body. Then
comes another black candle whose body remains inside the body of the first candle but it has a lower low (a lower shadow below the prior day's shadow). The last candle is a
white one with a short body that is below the body of the second candle in the pattern.

In this example, price is trending lower and the candle appears. The breakout is downward from this unique three-river bottom when price closes below the bottom of it. Since price
moves downward into the candle and exits out the bottom, the candle pattern acts as a continuation of the bearish price trend.

If the downward price trend leading to the candle pattern were longer, say by a few more weeks, then this chart would represent the idea trading setup. Price trends lower into the
unique three-river bottom and the stock breaks out downward. That setup means you should be trading with the trend -- downward.